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One wealthy backer of Simba, the online mattress seller, couldn’t contain his excitement about the start-up’s prospects in May last year. “I fundamentally believe that Simba will deliver a boatload of cash to all investors,” he said.

At the time, Simba, which was set up in 2015, still harboured hopes it would become a billion-dollar company, turning it into a so-called unicorn.

Simba’s arch rival Eve Sleep, which offers much the same product, a foam mattress in a box, was dismissed. “Simba s---- all over Eve, who are public,” said the investor.

Yet the two companies, launched a year apart, are now in “early stage” talks to merge. Rather than a triumph of one side over the other, the possible...